Updated 7/14 5:30 pm to include a statement from Stephen Handwerk
Former Louisiana State Senator Karen Carter Peterson is expected to plead guilty in federal court to using party funds and funds from her campaign. Peterson resigned from the Louisiana Senate in April, citing her gambling addiction and depression. According to The Times-Picayune|New Orleans Advocate, Peterson paid $50,000 to the state Democratic Party on Wednesday.
On Thursday, Peterson’s attorney, Brian Capetelli, confirmed that she signed a plea deal after federal prosecutors charged her with a single count of wire fraud. In a statement to the press, Capetelli noted, “This marks an important step in Ms. Peterson’s recovery as she continues to address her gambling addiction. She is sincerely remorseful for her compulsive behavior resulting from this addiction and has made full repayment of funds used as a result of her addiction.” Capetelli also said that Peterson “has been forthright, honest, and cooperative with the US Attorneys’ office in their investigation.”
The case has been assigned to U.S. District Judge Sarah Vance, although an arraignment date has not been announced. Peterson will have to plead guilty before Judge Vance as a condition of the plea deal.
Peterson led the Louisiana Democratic Party from 2012 until 2020 and served in the Louisiana Legislature for 22 years. Throughout her career, she was a noted progressive who often fought ardently against anti-abortion legislation.
On Thursday, the party issued the following statement:
“Today, federal authorities charged Senator Karen Carter Peterson with wire fraud committed in her former capacity as the Chair of the Louisiana Democratic Party. A plea deal has been signed, and we are confident that any wrongdoings will be brought to justice.
“Since Senator Peterson’s tenure as chair concluded nearly two years ago, the Louisiana Democratic Party has gone through extensive lengths to increase transparency and ensure the highest level of scrutiny in financial reporting under the leadership of new party chair, Katie Bernhardt. Among other initiatives, these efforts include: retaining the services of a nationally reputable compliance company; the transformation of internal operations for added checks and balances; increasing viewing privileges of accounting software to ensure financial oversight by numerous people; and clear monthly reporting to the party’s executive committee. In addition, LDP is in the final stages of retaining the comptrolling services of a company that has significant experience working with other democratic parties across the country.
“When I ran for chair two years ago, I heard the call for a complete overhaul of the Louisiana Democratic Party loud and clear from the people of Louisiana, and that’s what we’ve done,” said Party Chair Katie Bernhardt. “Since September of 2020, we have worked tirelessly to increase transparency and transform operations to turn this into an organization that will stand the test of time. Restitution has been made on behalf of Senator Peterson, which allows us to close that chapter of the Louisiana Democratic Party as we work to restore public trust and move into a more promising future. We are proud of the progress we have made so far, and we believe we are well on our way to becoming the Democratic Party that Louisiana deserves.”
“Further comment will be reserved so as not to impede the investigation.”
In a separate statement, former Louisiana Democratic Party Executive Director Stephen Handwerk said that he has been struggling with his feelings regarding the matter since he was notified of the investigation by the FBI earlier this year. He noted that he has cooperated with the U.S. Attorney’s office and the FBI investigators throughout their investigation as well.
“Early this year I was contacted by the FBI and investigators with the US Attorney informing me that I was either a victim of or witness to at least one felony,” Handwerk’s statement said. “I cooperated with them completely. Since that initial call and subsequent interviews, I have been struggling with feelings of compassion for her addiction along with anger and disappointment in Karen. As the evidence clearly illustrates, neither I nor my staff at the Louisiana Democratic Party had any knowledge of the elaborate scheme that Karen orchestrated. It is unfortunate that we will forever be associated with this. I sincerely hope that Karen gets the help she needs and that she is able to make amends with the people who placed our faith in her. This action today is a good first step in that long journey.”
In her resignation letter in April, Peterson noted that she struggled with gambling addiction and her mental health throughout her nearly 30-year legislative career. Peterson publicly admitted the gambling addiction in March of 2019, after a summons she received for violating a self-imposed ban on entering casinos was leaked to the press. In 2020, Peterson used her veto authority over governor appointees to remove Ronnie Jones, then-chairman of the state gambling board. Jones later accused Peterson of “vindictive motivation,” saying Peterson removed him because she believed that he was the source of the leak.
Members of the local gaming industry were shocked and dismayed by Peterson’s move.
In 2021, Big Easy Magazine endorsed Senator Peterson for Congress, but she ultimately lost in a run-off election to then-state Senator Troy Carter.
